Russian advertising ban on paid cable and satellite channels threatens independents

MOSCOW — An advertising ban on Russian cable and satellite TV stations could decimate regional television broadcasting from the suburbs of the capital to the far reaches of Siberia, leaving the country almost entirely dependent on state media for news and information.

The law, which will prohibit commercial advertisements on paid cable and satellite channels starting next year, is one of many measures Russian authorities have adopted in recent months to tighten control over the flow of information, reduce foreign money in Russian media and force journalists to hew closer to a pro-Kremlin line.

But the advertising ban threatens to deliver the most devastating blow to homegrown independent outlets where Russians get most of their news: television.

More than 100 regional stations available via cable and satellite will immediately be pushed to the edge of extinction when the law takes effect, as small and medium-size outlets are sapped of vital revenue. And because technological changes are moving all Russian television to digital, industry representatives say that unless they can secure changes before the new year, the advertising restrictions could soon force nearly all independent TV media without outside funding sources to close.

“What we are witnessing is the complete closure of this sphere of business, where the regional companies will be just left without anything,” said Sergei Isakov, deputy general director of Russia’s national association of television broadcasters. “When this ban is enforced, these stations won’t be able to survive.”

Russia’s television market is organized much like that of the United States, with free network channels and paid channels available over cable and satellite. As the United States did a few years ago, Russia is converting its broadcast systems from analog to digital, a process that is expected to be completed by mid-2018.

The changeover isn’t a big deal for Russia’s larger, government-approved broadcasters. But regulators haven’t specified plans to allocate digital airspace to most regional media outlets — which means many free channels may be pushed onto cable and satellite, where most won’t be able to survive if advertising is prohibited.

“They want to clear the market,” said Yana Belskaya, editor in chief of the television trade publication Cableman, noting that 2018, the deadline for the switch to digital, is also the year Russian President Vladi­mir Putin must run for reelection. “By 2018, the market will be completely different. I think, honestly, the main goal is not to have independent media by then.”

With that time frame in mind, several regional TV stations seeking broadcast licenses over the past few years were urged to find a home on cable or satellite instead.

When regional cable channel Surgut Inform TV started up in 2011, regulators said: “ ‘Why do you need to be a free channel? Go to cable TV, it will be easier, and develop your channels there,’ ” said Igor Yarosh, the station’s general director. He said the channel presents original news, entertainment and educational programming to about 800,000 people in Siberia. Because the channel depends “almost 100 percent” on advertising revenue, he said, the ban means just one thing: “the end.”

“We were fulfilling their demands, we were following the rules,” Yarosh said. “And then this ban was adopted.”

The official reason for the restriction, said Igor Zotov, the lawmaker who sponsored it, is market fairness. If consumers are paying for cable channels, he argued, those channels shouldn’t also be able to sell ads.

But paid channels claimed only about 2.6 percent of the national television advertising market in 2013 — and experts point out that sources of ad revenue aren’t the same for regional and national channels. Most advertisers on Yarosh’s channel, for example, are local businesses that wouldn’t seek or be able to afford time on a national station.

About 20 percent of Russia’s television audience watches via cable and satellite, and regional channels that broadcast through those mediums are often the best way for people who live in Russia’s far-flung regions to get local news and information.

Yarosh remains convinced that the whole situation is a big misunderstanding and that members of parliament would rewrite the law if they understood how hard it will hit regional broadcasters.

But Mikhail Serdiouk, who represents Yarosh’s region in the State Duma, or lower house of parliament, and is trying to roll back the ad vertising ban, sees far more systematic and sinister intentions in the law.

“Pro-government channels want to kill their competitors. If you kill these alternate, regional sources of information, then all the news you can get will be from the federal channels,” he said. “If there is an information vacuum, authorities can relax, because it won’t matter if officials are doing good things or bad things.”

Nationally, news outlets that have tried to serve as watchdogs of the government have come under intense pressure in recent years.

The best-known, Dozhd — “TV Rain” in English — is widely thought to be the intended target of the advertising ban.

Dozhd, formed in 2010, is an independent cable news station that gives a broad platform to the opposition view. In the past year, it has experienced a series of assaults, including allegations of trying to revive Nazism in Russia, after running a poll asking viewers whether the Soviet Union should have defended Leningrad in World War II. Dozens of cable providers dropped the channel soon after.

“Officially, we’ve never had any difficulties with the government or any state agency; all the problems were initiated by private owners, cable and satellite operators — officially,” Chief Editor Mikhail Zygar said in an interview at the Dozhd studio, as workers broke down shelves and packed boxes. The station recently lost its lease. “There is no proof that the Kremlin wants us to be destroyed — except for this law,” he said.

After cable providers dropped the station, Dozhd cut back about half the technical staff and a third of the reporting staff, often through attrition. When the State Duma adopted the advertising ban, Dozhd’s owner announced that the channel would raise its annual subscription from about $25 a year to about $120.

The station is also splitting its live stream, Zygar said, so it can keep selling ads online and internationally, even if doing so is prohibited in Russia.

Dozhd will survive the advertising ban, as it has survived other setbacks, Zygar said.

But when asked whether in this environment a new, independently minded operation could hope to establish itself in Russia’s media market, as Dozhd did four years ago, his outlook was far bleaker.

“No,” he said. “It’s impossible.”